Petronet LNG books highest ever quarterly profit of Rs 1,181 crore in Q3

The company argued it was able to achieve robust financial results due to cooling global LNG prices, and operational optimization cutting power and fuel costs

India’s largest Liquified Natural Gas (LNG) importer Petronet LNG booked highest ever profit of Rs 1,181 crore in the third quarter of FY23, up from Rs 1,144 crore in the year-ago period. Profit stood at Rs 744 crore in the second quarter.

The company, a joint venture of state-owned Bharat Petroleum, IOCL, ONGC, and GAIL, arg­ued it was able to achieve the results due to cooling global LNG prices, and operational optimisation cutting power and fuel costs. The company has reported highest ever turnover of Rs 46,025 crore in the first nine months against Rs 32,008 crore in the same period in FY22, a 44 per cent rise.

In a post-result call, Petronet LNG Managing Director and Chief Executive Officer Akshay Kumar Singh said the company was collecting data to process the environmental and pollution clearances for its upcoming project at Gopalpur port in Odisha’s Ganjam district. The port has a unique advantage of having a well-developed break water system.

With a capital expenditure of Rs. 2,300 crore, Gopalpur would be the first eastern coast terminal of the company.

The company is expanding capacity by 9 million tonnes (mt), including 5 mt at its LNG terminal at Dahej in Gujarat and 4 mt capacity at Gopalpur. The Dahej project is expected to take 2 more years, while Gopalpur will take 3 years, Singh said.

“Usually, greenfield projects in the sector cost Rs 5,500-6,000 crore. But in our case, it has been done at a cost of Rs 500-600 crore, or at less than 10 per cent of the actual cost,” Singh said.

Dahej is the largest single location LNG storage and regasification terminal in the country and capacity utilization has gone up to 80 percent in Q3, up from 60 percent in the previous quarter. At it's terminal in Kochi, utilization has crawled up to 20 percent, up from 16-17 percent in the previous quarter, he added.

Going forward

Singh said the global volatility had not dented the company’s future plans. Instead, a softening of LNG prices in the past month has now allowed the company to go forward with it's ambitious plan of 1000 LNG dispensing stations across the country.

"Current export prices are hovering at $17, which is a good sign. The price projection for Q4 is $17-$20 given an unusually warm winter in Europe, as well as increasing volume of wind power in that region," Singh said.

As a result, India is expected to receive a higher volume of incoming cargo in coming months as they won't be diverted towards Europe.

The purchase situation would become better as prices come down to long term levels. Prices In the previous quarter were at the range of $25-$30, down from their historical highs of $35 in October and November of 2022.

According to Petronet, India’s LNG imports are expected to hit 23-24 mt if global prices continue cooling. Imports have historically been around 26 mt, but had reduced to 24 mt last year.